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24th June 2018 Part-4: Daily News Analysis
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External debt problem

## Jatin Verma is teaching live on Unacademy Plus

Jatin Verma
Have appeared in UPSC CSE thrice. Have been taking Unacademy Plus courses Academics- Polity, Economics & Current Affairs.

U
now my understanding of reasoning somehoe better than previous
Kindly try to make in english sir...its difficult to understand..
very nice explanation
very nice explanation
very nice explanation
very nice explanation
1. treatof activist Rohit Choudhury has complained about Page-9: 'Rhino habitat under of mining' The lynching of two adventure enthusiasts a fortnight ago has put the focus on rampant mining, quarrying and stone crushing activities the non-implementation of the recommendations of the National Tiger Conservation Authority (NTCA) by the Assam government for stopping all mining, quarrying and stone crushing activities in the Kaziranga-KarbiAnglong landscape. e that are threatening the ecology of the he Kaziranga-KarbiAnglong landscape. Reports later suggested that they could have been silenced for knowing too much about illegal mining and stone quarrying while exploring the area around a waterfall named Kangthilangso. The area where the duo was killed is close to the Kaziranga National Park, home to the largest population of one-horned e an k h ent un *rhinos in the world. Outlining the threat posed to the rhino habitat, also a tiger reserve, environmentalist and RTI* ksa

2. "NTCA ignored, The NTCA had in its report on April 20 asked the State government to immediately stop such activities that are severely hampering the survival and conservation of the tiger, its habitats, co-predators, prey, including mega herbivores, and their transit routes during the annual flood season," Mr. Choudhury said on Saturday. bat th y hav reve .During floods, animals of low-lying Kaziranga National Park flee to the adjoining kills of he p Karbi Anglong district. Some stone mines and quarries are on their transit routes. slay The NTCA found that stone mining/quarrying and stone crushers in the area betweern Kaziranga and the Karbi Anglong hills are responsible for the destruction of wildlife corridors and vital wildlife habitat essential for long ranging species like Indian elephants n and tigers or us erent In addition, these stone mining/quarrying and stone crushers are also responsible for drying a pu up and siltation of several natural streams and rivulets flowing from the KarbiAnglong hills towards Kaziranga," Mr. Choudhury wrote in his letter. rk and It stay The Assam government, he said, has shown "complete disregard" to the NTCA's recommendations. Accusing the State Forest Department of corruption, Mr. Choudhury sought action from the Union Ministry ich

3. want to be starting ganses, beiag anted to show the boss whatcE The Kaziranga-Karbi Anglong Landscape (KKL) is a vital site situated within the Indo-Burma biodiversity hotspot. KKL is spread over 25,000 km2 south of the Brahmaputra River in Assam, touchingthe neighbouring states of Meghalaya and Nagaland in north-eastern s bnat th 0 3 2 2 y hav ARB ANGLONG LANDSEAPE reve KARBIANGLONG LANDSCAPE INDIA 4 slay KAZIRANGA NATIONAL PARK or us hink h cause h rk and t sta ch

4. Page-12:12 WHO WHAT WHY WHEN WHERE Is external debt a cause for worry? [GSM-3: Economy] External debt is the money that borrowers in a country owe to foreign lenders. India's external debt was $513.4 billion at the end of December 2017, an increase of 8.8% since March 2017. Most of it was owed by private businesses which borrowed at attractive rates from foreign lenders. To be precise, 78.8% of the total external debt ($404.5 billion) was owed by non- governmental entities like private companies. The size of external commercial borrowings and foreign currency convertible bonds, which represents Indian companies' foreign borrowings, has risen from 99,490 crore at the end of December 2015 to R1,72,872 crore at the end of December 2017. While external debt may be denominated in either the rupee or a foreign currency like the U.S. dollar, most of India's external debt is linked to the dollar. This means Indian borrowers will have to pay back their lenders by first converting their rupees into dollars. As of December 2017, about 48% of India's total external debt was denominated in dollars and 37.3% in rupees. . . . . . .

5. .What are the risks? . There are two major risks involved in foreign borrowings .One is that, like in the case of domestic borrowings, there could be unexpected changes in the interest rates charged on these loans. This can, for instance, cause widespread default when rates rise as borrowers may not be able to make higher interest payments, thus raising the risks of a systemic crisis. The raising of interest rates by the U.S. Federal Reserve has already caused borrowing rates to rise in various countries, including in India where bond yields have shot up sharply. The yield on the 10-year government bond, for instance, has risen to about 8% from around 6.5% at the end of June last year. Another major risk is unexpected changes in the exchange rates of currencies. .An unexpected fall in the value of the rupee, for instance, can cause severe difficulties for Indian companies that need to pay back dollar-denominated loans as they will now have to shell out more rupees than they had previously estimated to buy the necessary dollars. Lenders generally take possible fluctuations in the value of currencies into account when determining their lending rates.

6. want te be starti But such forecasts are not always perfect. Unexpected changes in exchange rates could stll impose surprise gains or losses on them. Various emerging market currencies have seen a sharp fall in value this year against the dollar. The rupee, in particular, has fallen about 7% since the beginning of the year. The fall in the value of the emerging market currencies is due to increasing demand for dollars from investors, who wish to sell " their assets in the emerging markets and invest them in the U.S. where yields have been rising quite he rapidly. . What happens next? .The U.S. central bank, which has already raised its benchmark interest rate twice this year, is expected to raise rates two more times in the rest of 2018 Further interest rate hikes could cause more outflow of capital from the emerging markets, thus causing unexpected changes in borrowing rates and the value of the rupee. Both government and non-government borrowers in India, who are exposed to foreign debt, could , be in trouble in such a scenario. e an k h ent .The foreign exchange reserves, held by the Reserve Bank of India (RBI), were around S425 billion as on March 2018. ksa

7. want to be starting ganses, beiag anted to show the boss whatcE This is the firepower that the RBI can use to support the rupee and bail out borrowers who get into trouble. The RBI, which raised its benchmark interest rate for the first time in more than four years this month, may also decide to raise domestic interest rates further. While such a step could help to stem the capital outflow from the country and support . y has reve e#the rupee, it could lead to further uncertainty about borrowing rates in the domestic economy hink h fferent a pu Ivis rk and t sta par eent

8. anted to show the boss whatcE imp s bnat th y hav pho reve he g layer or us hink h cause h a pu rk and

9. .dI 8196 11:56 Thank you Jatin Verma 155k Followers Follow Ratings & Reviews Roman Saini A great course by Jatin Verma where he has literally covered all the important news from The Hindu. Must watch. Mohit Rai If i achieve my aim, my first salary will go to this great individual making this great informative and well-researched videos. I should take this opportunity to thanlk and congratulate him for the wonderful work he is doing for all the aspirants. He is meticulous and almost perfect in his approach and understanding. Please keep making such videos as a single 26k Enrollments Enroll